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Edited Transcript of BTB.UN.TO earnings conference call or presentation 15-Mar-17 2:00pm GMT

Thomson Reuters StreetEvents

Q4 2016 BTB Real Estate Investment Trust Earnings Call

Nov 22, 2017 (Thomson StreetEvents) -- Edited Transcript of BTB Real Estate Investment Trust earnings conference call or presentation Wednesday, March 15, 2017 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Michel Leonard

BTB Real Estate Investment Trust - President & CEO

* Benoit Cyr

BTB Real Estate Investment Trust - VP & CFO

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Conference Call Participants

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* Frederic Blondeau

Eight Capital - Analyst

* Rob Sutherland

Echelon Wealth Partners - Analyst

* Matt Kornack

National Bank Financial - Analyst

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Presentation

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Operator [1]

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Good morning. My name is Sylvie and I will be your conference facilitator today. At this time, I would like to welcome everyone to the BTB Real Estate Investment Trust 2016 fourth-quarter and year-ended December 31, 2016 financial results conference call. (Operator Instructions).

Before turning the meeting over to management, please be advised that some of the statements that may be made during this call may be forward-looking in nature. Such statements involve known and unknown risks and uncertainties that may cause the actual results of BTB Real Estate Investment Trust to be materially different from those expressed or implied by such forward-looking statements.

The risks, uncertainties and other factors that could influence actual results are described in BTB Real Estate Investment Trust's management discussion and analysis of financial results and in its annual information forms, which were filed on SEDAR and on BTB's website at www.btbreit.com.

I would like to remind everyone that this conference is being recorded. Thank you.

I will now turn the conference over to Mr. Michel Leonard, President and Chief Executive Officer and Mr. Benoit Cyr, Vice President and Chief Financial Officer. Mr. Leonard, you may begin your conference.

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [2]

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Thank you very much and thank you for joining us this morning. I don't know if you are aware, but, in Montreal, it's a very difficult morning with 34 centimeters of snow and the streets have not been cleared, so on this note, Benoit and I are not in the same room as a result of the fact that certain highways have been closed and Benoit is taking this call from his house.

So the gist of our results for the year 2016 is that we saw an increase in rental income from CAD72.8 million to CAD73.4 million. We had a small increase in net operating income. We had an increase in net income from CAD8 million to CAD22 million, but that was mainly due to certain fair value adjustments in our properties.

Our same-property NOI decreased from CAD24 million to CAD23.8 million namely caused by certain buildings of note that we've discussed throughout the year last year, but noting 1001 Sherbrooke East, in January 2016, our occupancy rate was down to 33% and now it's up to 56%. And in this building, our breakeven point is approximately 60%, so we are very close to this building and no longer contributing to a decrease in the same-property NOI.

50 Saint Charles in Longueuil is again a property where we only have one tenant in occupancy. During the course of 2016, we extensively renovated the lobby and common areas and right now, we have persistent leasing activity and we certainly feel that we are going to be able to contribute actively to the leasing of this property.

The breakeven point of this property given the fact that the operating costs are lower than 1001 Sherbrooke is approximately 50%. At 80 Aberdeen, we saw the City of Ottawa leave the building in the last quarter of 2016. That was 30,000 square feet. We've given the assignment to CBRE to proceed with the leasing of the 30,000 square feet and right now, we have really, really good leasing activity, good traction for this property and we feel that, during the course of 2017, the problem will be resolved.

The property in Three Rivers, our office building in Three Rivers, we saw the departure of the government for close to 30,000 square feet and that, again, has affected our same-property NOI and right now, we are actively marketing the property, that space and unfortunately, we don't have any takers for the space.

The Trans-Canada Highway property, although not calculated in the same property NOI decrease, our renovations are fully completed and right now, we have great traction for at least half of the property.

We saw our occupancy rate decrease from 91.7% to 90.5% mainly for the reasons that I have just annunciated and was mainly in the office segment, as I mentioned earlier.

Our FFO increased from CAD16 million to CAD17 million. However, on a percentage basis, the FFO increase from 88.6% to 92.8%. Had we not redeemed the debentures, we would've ended the year at 82.4% and that percentage was certainly better than the previous year. We are still focused on debt reduction.

Our AFFO increased from CAD17 million to CAD17.3 million. However, on a percentage basis, again, we saw the number increase from 89% to 94.5% and again, if we had not redeemed the debentures during the course of 2016, we would have ended the year at 88%, again, better than the previous year.

We saw our total asset increase from CAD633 million to CAD658 million, mainly due to an acquisition of a property early in 2016 and to fair market value adjustments of certain properties.

Our convertible debentures were down from a total of CAD68 million to CAD47 million as you are aware. It reduced our loan to value ratio from 11.5% to 7.6% and our total debt ratio from 71% to 65.7%. Our next opportunity to redeem a debenture is going to be as of March 2018.

Regarding our leasing activities, in 2016, we renewed 61% of our leases and we leased 200,000 square feet of vacant space. And that generated a 5.6% increase in the revenue generated from these rental activities.

Our perspective for 2017, we have 800,000 square feet coming to maturity. We know that roughly 340,000 square feet won't be renewed at this point. That means 42% of our lease renewals and those are caused mainly in the industrial segment. By example, Cornwall, we know that there's not going to be a renewal for 144,000 square feet at 705 Boundary Road, and 30,000 square feet at 2901 Marlowe.

In this last property, we just leased 10,000 square feet of the 30,000 square feet and we also have a property located in Montreal on the island of Montreal of 80,000 square feet of industrial space. That is currently subleased and hence, we don't anticipate that this sub-tenant nor the main tenant is going to renew that lease.

So if we look at an overall total, we can renew 58% of our leases coming to maturity in 2017. To date, we have renewed 15% of those leases. We have documents ready for tenant signature 2% and we are finalizing tenant terms and conditions for renewals on 27%. Therefore, of the 58% that we can renew, we've already tackled 44% and therefore, there is a balance of 14% that we have to follow up on and we are fairly confident on those numbers.

We've also, at the end of 2016, the beginning of 2017, given the fact that we celebrated our 10th anniversary in 2016, we proceeded with a strategic review of our portfolio and the Board has decided that there were certain nonperforming properties that were going to be disposed and these properties include Drummondville, [Thibault] and Three Rivers, Magog and 2905 Marlowe, which is the building where it's a very small property of 4,000 square feet and that is the tenant that basically is moving to 2901 Marlowe, taking an expansion of 6000 square feet.

Also, we have certain non-core properties. During the strategic review, discussions occurred and decisions were made regarding our investments in certain markets and the Board has decided that, in the midterm, we were going to basically get out of smaller markets and concentrate our future acquisitions in larger markets, including Quebec City, Montreal, Ottawa and even venturing into the suburban Toronto market.

So those properties that are located in smaller markets are eventually going to be sold, as I mentioned, in the midterm range and those properties we would call them eventually non-core properties.

So the goal is to basically do some capital recycling to fund our future growth and again, concentrating in major markets and also looking at the way that the investments of BTB have been made in the different market segments, meaning office, industrial and retail segments and we feel that we are a little bit too weighted in the office sector and therefore, we are going to try to rebalance the portfolio, again remaining very opportunistic as far as the investments are concerned. However, we are definitely looking at rebalancing the portfolio.

So with this, I would like to ask Benoit to give you a summary of our results for Q4 and as well as for the year 2016.

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Benoit Cyr, BTB Real Estate Investment Trust - VP & CFO [3]

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Thank you, Michel. Good morning, everyone. In terms of acquisition, 2016 has been a quiet year. We purchased one property in February 2016, the 2101 West Saint-Catherine in Montreal, a 52,000 square foot building, fully renovated and entirely leased to Technicolor Canada on a long-term basis.

At the end of December, our portfolio consisted of 72 properties representing over 5.1 million square feet of rentable area and having a market value of approximately CAD646 million.

Result of the sale of four properties in December 2015 and even if we bought one property in last Q1, our rental revenues were down 1% or CAD269,000 for Q4 2016 compared to the same in 2015.

On an annual basis, our revenues are up CAD492,000 or about 1%. And property we have sold in December 2015 were producing yearly CAD2.1 million of gross revenues. We recorded a decrease in our operating expenses of 4.3% between the fourth quarter of 2015 and the fourth quarter of 2016. For the entire fiscal year, we recorded an increase of 1.4%.

Our NOI was up 1% for the quarter compared to the same in 2015, reaching CAD10.1 million. On an annual basis, the NOI is stable. Again, properties we've sold in December 2015 were producing approximately CAD1 million of NOI. As a percentage of revenues, the NOI is at 55.4% for the quarter from 54.0% in Q4 2015. On a cash flow basis, after a deduction of non-cash adjustments, the NOI is at 56.8% compared to 55% in 2015. And yearly, the cash NOI is stable at 57.5%.

Financial expenses are down from CAD5.1 million to CAD4.1 million or approximately 31% due to the following reasons. First, the repayment of the Series B debenture in August. Second the partial repayment of our acquisition line of credit and third, the greater interest rate volatility and higher bond yields during the last quarter result in a value gain of CAD823,000 in our two interest rate swaps.

The reimbursement of the Series D results in the writeoff of the unamortized portion of financing expenses and of the liability component of the debentures. This writeoff totaling CAD1,088,000 has increased the financial expenses during the third quarter and so affected negatively by CAD0.026 per unit some of our annual performance indicators.

On a yearly basis, our financial expenses are down CAD1.8 million or 7.6%. Our average weighted contractual rate of interest on mortgage loans is now at 3.79%, 16 basis points lower as at the end of last year.

Our trust and administrative expenses are at CAD1.1 million compared to CAD907,000 in Q4 2015. At year-end, we used professional evaluators to perform an independent external evaluation of a portion of our portfolio. A sample of the portfolio's largest properties and approximately a third of the remaining properties were subject to an independent external evaluation.

As at December 31, 2016, 63% of our portfolio market value was subject to external evaluation. We determined that a fair market value adjustment to the portfolio at the end of the year was required and so we recognized an impairment gain of CAD6.200 million. It's mostly in the retail sector that we notice a market value increase.

The weighted average cap rate for the entire portfolio at the end of December was 7.20%, down 14 basis points from last year. We present a net income of CAD9.1 million for the fourth quarter of 2016 compared to a loss of CAD2.1 million in Q4 2015. This reversal is mainly due to the increase in the fair market value of our portfolio in the amount, as I said, of CAD6.2 million compared to a decrease last year of CAD5.2 million.

The same-property NOI shows a decrease of 1.2% for Q4. On a yearly basis, the same-property NOI shows a decrease of 3.4% and Michel gave some explanations at the beginning of this conference. We expect the same-property NOI growth to continue to be slightly negative for the next two quarters and to become neutral or lightly positive in the last quarters of 2017.

As previously mentioned, the trust issued last summer 7.2 million units as at CAD4.55 for a net proceed of CAD31 million. Proceeds were used to pay back the Series D debentures in the amount of CAD23 million, which were bearing interest at 7.25% and to reduce our acquisition line of credit in the amount of approximately CAD6 million, which was bearing interest at 5.95%.

These transactions were done to reduce the trust's debt ratio by over 400 basis points, but these transactions have negatively impacted on some of our performance indicators -- first, a reduction of approximately CAD0.012 per unit per quarter or CAD0.05 on a yearly basis on the distributable income, the FFO and the AFFO per unit; second, increases in payout ratios by approximately 8%.

We have calculated the following indicators also on a pro forma basis as if the unit issue and the allocation of the proceeds didn't take place. Our distributions increased from CAD3.6 million in Q4 to CAD4.4 million in Q4 2016 from 2015 to 2016, including CAD0.5 million under our DRIP, which represents 11.6% of our total distributions.

On a yearly basis, we have distributed [CAD16.4 million], of which CAD2 million were converted in units under our DRIP. Our recurring DI for the quarter amounted to CAD5 million or CAD0.12 per unit compared to CAD4.2 million and CAD0.122 per unit in Q4 2015. On an annual basis, our DI was at CAD0.517 in 2016 compared to CAD0.52 in 2015. So remain quite stable.

Our distribution payout ratio for Q4 2016 stood at 88% from 88.6% for the same last year. On a pro forma basis, our recurring distributable income from Q4 2016 would have amounted to CAD0.132 compared to CAD0.122 in Q4 2015 and our payout ratio would have reached 80% compared to 86.4% in Q4 2015.

Our recurring FFO reached approximately CAD4.8 million for the quarter compared to CAD3.7 million last year, CAD0.114 per unit this quarter and CAD0.107 last year. On a yearly basis, the recurring FFO was at CAD0.459 in 2016 and CAD0.498 in 2015.

Again, on a pro forma basis, the recurring FFO would have reached CAD0.126 per unit compared to CAD0.107 last year, an increase of CAD0.019.

Finally, our AFFO amounted to CAD4.5 million, CAD0.106 per unit this quarter compared to CAD3.6 million and CAD0.104 last year. On a pro forma basis, the recurring AFFO would have reached CAD0.118 per unit this year compared to CAD0.104 last year, an increase of CAD0.014.

Our balance sheet presents investment properties at fair market value amounting CAD646 million compared to CAD623 million last year. We had CAD6.7 million in cash and other assets amounted also CAD6.3 million, the same as in December 2015.

We spent approximately CAD1 million in recoverable and nonrecoverable CapEx during the quarter. Also, we spent over CAD968,000 in TIs to meet the specific needs of our clients, as well as commissions paid to broker. For the entire fiscal year, we spent CAD2.7 million in CapEx, as well as CAD4.1 million in TI and leasing fees.

Mortgage loans payable amounted CAD386 million at the end of December and were at CAD367 million in December 2015. During the year, we entered into two new financing agreements for a total of CAD9.9 million with an average term of 4.2 years and an average rate of 3.6%.

We also entered into seven refinancings this year for a total of CAD87.2 million. These agreements are for terms of 1 to 10 years with a weighted average term of 7.5 years and fixed rates ranging from 2.88% to 4.11% with a weighted average rate of 3.5%. These financings allow us an equity takeout of approximately CAD16 million.

Our mortgage loan to value ratio is now at 59.1 compared to 58.4 at the end of 2015. We now have two series of debentures outstanding for a net book value of CAD47.7 million. Again, during the year, we used the proceeds of our unit issuance to redeem the Series D in the amount of CAD23 million, which Series D has an interest rate of 7.25%. The Series E would be redeemed at the end of March 2018 at their principal amount.

The total LTV ratio is now at 65.7%, 520 points below last December. Our lines of credit are actually fully reimbursed. We have CAD65 million of mortgage loans coming to maturity by the end of this year, but mostly in the last two quarters. They are at an average rate of approximately 3.8%.

That's all for my section and I would like to thank you for your attention and I now turn back the conference to the conference facilitator for questions from analysts. Again, thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions). Frederic Blondeau, Eight Capital.

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Frederic Blondeau, Eight Capital - Analyst [2]

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Congratulations on the strategic review; well-presented. In terms of the five properties with occupancy below 75%, I guess in addition to Sherbrooke's property, and also Metropolitan as well, how much more time do you think it will take to stabilize properties?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [3]

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Obviously, there are some properties that have a low occupancy rate and those properties -- certain of these properties we have decided to basically work them out and get to the good leasing velocity. There are certain properties where we have abandoned, for lack of a better word, and those would include our Magog property. It would include our Drummondville property and a property in Three Rivers and the reason I'm not going to say the name of the street, it's because we do have an offer to purchase this property at a certain price and we do have an offer right now on the table where we are negotiating back and forth for the leasing of 5,000 square feet. And we all can surmise that, if we are successful in leasing the 5,000 square feet, then obviously the property is worth more and we are banking on being successful in leasing this 5,000 square feet and hence driving more money as far as the sale is concerned.

The property located at 50 Saint Charles is one that we are going to have to be patient. There is a lot of interest from tenants. Right now, the ground floor, which is 6,000 square feet, we have a potential tenant for it. On the second floor, we have three potential tenants, smaller, but that would total another 6,000 square feet. This is a property that is roughly 20,000 square feet, so we are very confident that we are going to get to the end of it and get it into a positive territory.

Obviously, our property on Trans-Canada Highway is causing a loss in NOI as a result of it being vacant. It's not necessarily calculated because it's a property under redevelopment, but the offers that we are -- there is one offer that we have for the whole building; not sure about the use and this offer would be roughly generating a little bit more than CAD400,000 of NOI.

But, at the same time, we've got another, I would say, a little bit less than five that would have interest for higher rent, so there is a dilemma right now surrounding the leasing of this property, but I am very confident that, this year, it's going to happen and it's going to be done.

1001 Sherbrooke I did mention and 1001 Sherbrooke is a property that, at 60% occupancy, it's no longer going to draw on our NOI and we are 4% away from it. So we believe in this property. It is well-located. The different improvements that we have done stimulated interest. We are confident right now. We are in the midst of negotiating I would say between 12,000 to 15,000 square feet for one tenant. So we are crossing our fingers on that one and we do have an existing tenant that wishes to take more space on to this property. So again crossing our fingers.

2905 Marlowe, as I mentioned, is a small 4,000 square foot property and we've put it on the market as a result of its current tenant moving to another property of ours in Cornwall and there is interest in the sale of this property. So I don't think that it's going to impose a loss of NOI because it's highly probable that by the time that the tenant vacates and moves on to 2901 that the property is going to be sold.

We have given the assignment to CBRE as well to sell the property located on Harvey Boulevard in Saguenay. We did receive some interest, but no offers yet. We are going to put on the market a property that doesn't draw on our NOI because it's full, but is a question of believing in the long-term value for BTB. So there are four properties that are going to be put on the market that basically do contribute to NOI, but we certainly feel that by repositioning and by redeploying our capital that we are going to generate more NOI out of these properties.

So, Fred, I don't know if it answers fully your question, but this is sort of the -- yes, go ahead.

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Frederic Blondeau, Eight Capital - Analyst [4]

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And (inaudible) know then Sherbrooke is not for sale, right?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [5]

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No, (inaudible), not in Magog and I didn't talk about it. I thought that I did, but (multiple speakers). The one in Magog we have -- I think I skipped over it -- the one in Magog we have an interested party to purchase it and we have -- it seems that we are the finalist on an interested tenant to lease the balance of the space.

So either/or, at the end of the day, even if we were to lease it, it would not be a property that we would keep. Because although fully leased and contributing to NOI, it's a property that's located in a very, very small market and for BTB, we are at the cusp of basically centralizing and acquiring larger and higher-producing NOI properties.

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Frederic Blondeau, Eight Capital - Analyst [6]

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Perfect. And what are your views on the same-store NOI for 2017? You just mentioned it should be negative for H1. I was wondering what could this mean for the whole year.

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Benoit Cyr, BTB Real Estate Investment Trust - VP & CFO [7]

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Clearly, the first two quarters will be negative. We think that Q3 will be neutral and Q4 a little bit positive, but for the entire year, I think it's going to be negative, slightly negative for the year, yes.

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Frederic Blondeau, Eight Capital - Analyst [8]

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Okay, perfect. And lastly, in terms of this loan for which you don't meet the debt service coverage ratios, I was wondering how much time it will take to correct the default?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [9]

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This is linked to our property located at 50 Saint Charles and this is the empty property, so obviously no NOI and as a result, there is no debt coverage. Last year, we were in the same position and the creditor basically issued a waiver and during our discussions for this year, we would have loved to have the waiver prior to issuing our financial statements.

However, the lender did not do its review of the property -- and we all understand that nothing has changed -- but has not done its review. We are obviously 95%, 98%, 99% confident that we will get the waiver again, but it's just technical and it's linked to the fact that -- I wouldn't call the lender governmental, but let's say that if you have from 1 to 5, 5 being governmental and 1 being opportunistic and having more tendency towards business, let's call that this lender is a 4.8.

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Frederic Blondeau, Eight Capital - Analyst [10]

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Okay.

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Benoit Cyr, BTB Real Estate Investment Trust - VP & CFO [11]

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Just to add to what Michel said, it's a portfolio of three properties. So the two others are okay. So basically we do not meet the target, but we are just below it. It's not dramatic.

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Frederic Blondeau, Eight Capital - Analyst [12]

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So Q1 should be resolved, right?

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Benoit Cyr, BTB Real Estate Investment Trust - VP & CFO [13]

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Q1 or Q2 should be resolved. Yes.

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Frederic Blondeau, Eight Capital - Analyst [14]

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Okay, perfect. Thank you.

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Operator [15]

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(Operator Instructions). Rob Sutherland, Echelon Wealth Partners.

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Rob Sutherland, Echelon Wealth Partners - Analyst [16]

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So Fred asked most of them. I guess just in terms of the dispositions, can you give us around what the LTV is on average for those properties?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [17]

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What I can tell you is that the properties that have a negative NOI that we've decided to sell would crystallize about CAD10 million of value -- net, net of mortgages. (multiple speakers). By doing the reverse calculation, it's going to give you the number.

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Rob Sutherland, Echelon Wealth Partners - Analyst [18]

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Okay. And then one thing you did mention that perked my ears up as well is looking at new markets and you did say that you are looking at potentially suburban Toronto?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [19]

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Yes, last year -- we started looking at suburban Toronto last year. I had a meeting with the guys at CBRE and we started looking -- we saw that there were a few properties, whether in Mississauga or maybe a little bit further north, that could suit our needs and that the cap rates were acceptable to BTB.

So our goal is when we redeploy our capital is obviously -- again, we always buy accretively and our target is to buy accretively and so we definitely want to look at the market and make investments in that market.

The overall aspect of it, I think it's a very buoyant market, as you are aware and it is a part of the landscape of Canada that I know well, so it is a foray that we intend to take.

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Rob Sutherland, Echelon Wealth Partners - Analyst [20]

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And that would be presumably industrial?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [21]

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Industrial. In my own definition, I don't think that we would -- our foray, I wouldn't call Barrie, Ontario to be a suburb of Toronto, so we wouldn't go that far, but if we could look at newer developments north of Vaughan and that kind of situation, I think that it would also please us regarding our retail aspect.

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Rob Sutherland, Echelon Wealth Partners - Analyst [22]

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Okay. And then just the last one. With Trans-Canada, you said that it was the 100% offer for occupancy, but you weren't sure of the use. It that a cannabis producer?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [23]

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No. I want to start that business. No, it's a use that really perplexes me and I can't really be forward and tell you what the use is, but it is definitely not illegal. I just don't know if it is sustainable, let's call it that way. And it would be fine, I could basically plug a hole today by accepting it. However, long term, is it good value, is it a good decision. That's the part that I don't know.

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Rob Sutherland, Echelon Wealth Partners - Analyst [24]

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Okay. That's it for me. Thank you.

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Operator [25]

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Matt Kornack, National Bank Financial.

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Matt Kornack, National Bank Financial - Analyst [26]

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Just had a quick question, with regards to the strategic review and the repositioning of the portfolio, how much would you say of your portfolio is currently reclassified as non-core from a dollar value or a percentage standpoint?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [27]

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It's a little bit less than CAD100 million.

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Matt Kornack, National Bank Financial - Analyst [28]

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Okay. And in terms of the timeline on executing on the strategy, what is your view on that front? Is this going to be a 2017 story?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [29]

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2017 for the short term. So the properties that basically have a negative NOI. Some properties that would be non-core would be in 2017 and there are two or three that would be 2018.

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Matt Kornack, National Bank Financial - Analyst [30]

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Okay. And then for the same-property NOI guidance that you've given, you do have significant lease maturities and the color that you provided on that front was helpful. What are the assumptions on those maturities to get to the same-property NOI growth? Are you assuming that you will get new leases essentially to cover the existing ones and is there a (multiple speakers)?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [31]

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No, we are not. As part of our scenario, for instance, in Cornwall, although it's 144,000 square feet in our budget, we basically have the hypothesis that we are leasing 60,000. So it's not -- we are being aggressive on the leasing front, but there are certain things that we recognize that are not going to be plugged instantly.

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Matt Kornack, National Bank Financial - Analyst [32]

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Okay. And then on the occupancy side, for the figures that you have in the financials, those are committed, correct?

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [33]

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Yes, committed. Yes.

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Matt Kornack, National Bank Financial - Analyst [34]

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And do you have a sense as to what the spread is between in-place and committed at this point and is it broader than it would've been historically?

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Benoit Cyr, BTB Real Estate Investment Trust - VP & CFO [35]

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Probably around the 50 basis point (multiple speakers).

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Matt Kornack, National Bank Financial - Analyst [36]

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Okay, so fairly tight.

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Benoit Cyr, BTB Real Estate Investment Trust - VP & CFO [37]

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Average during the past [separate] approximately that.

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Matt Kornack, National Bank Financial - Analyst [38]

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Okay, great. That's it for me. Thanks, guys.

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Operator [39]

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At this time, there are no further questions. Please go ahead, Mr. Leonard.

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Michel Leonard, BTB Real Estate Investment Trust - President & CEO [40]

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Thank you again for participating in this call. I think that 2016 has allowed us to put in place the right measures in order to reduce debt. This year, as far as a great activity of reducing debt, there's nothing really we can do. We are looking at 2018 and if the market forces are in place for us in 2018 in March, 2019, then obviously our goal is to look at the redemption of the debenture that will come to maturity in 2020.

Overall, it's executing the strategic plan, which is repositioning properties, acquiring better properties, larger properties in larger markets and so that's where we are focused and I think that it's a plan that we can achieve, that we can perform and hence, it will produce better results.

So overall, again, we do thank you for your support and we will see you in a few weeks for our Q1 results. So thank you very much again for participating.

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Operator [41]

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This concludes today's conference call. You may now disconnect.